94TH GENERAL ASSEMBLY
State of Illinois
2005 and 2006
SB1486

 

Introduced 2/23/2005, by Sen. James F. Clayborne, Jr.

 

SYNOPSIS AS INTRODUCED:
 
40 ILCS 5/15-136   from Ch. 108 1/2, par. 15-136
40 ILCS 5/15-136.3
40 ILCS 5/15-137.1 new
40 ILCS 5/15-145   from Ch. 108 1/2, par. 15-145
40 ILCS 5/15-155   from Ch. 108 1/2, par. 15-155
40 ILCS 5/15-165  from Ch. 108 1/2, par. 15-165

    Amends the State Universities Article of the Illinois Pension Code. Declares it to be the public policy of this State and the intention of the General Assembly to protect annuitants against significant decreases in the purchasing power of retirement and survivor's annuities. Directs the System to review and report on significant changes in purchasing power. Provides for a one-time increase in certain retirement and survivor's annuities. Requires the resulting liability to be paid on a level dollar basis over a period of 10 years beginning July 1, 2007. Effective immediately.


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FISCAL NOTE ACT MAY APPLY
PENSION IMPACT NOTE ACT MAY APPLY

 

 

A BILL FOR

 

SB1486 LRB094 10717 AMC 41124 b

1     AN ACT in relation to public employee benefits.
 
2     Be it enacted by the People of the State of Illinois,
3 represented in the General Assembly:
 
4     Section 5. The Illinois Pension Code is amended by changing
5 Sections 15-136, 15-136.3, 15-145, 15-155, and 15-165 and
6 adding Section 15-137.1 as follows:
 
7     (40 ILCS 5/15-136)  (from Ch. 108 1/2, par. 15-136)
8     Sec. 15-136. Retirement annuities - Amount. The provisions
9 of this Section 15-136 apply only to those participants who are
10 participating in the traditional benefit package or the
11 portable benefit package and do not apply to participants who
12 are participating in the self-managed plan.
13     (a) The amount of a participant's retirement annuity,
14 expressed in the form of a single-life annuity, shall be
15 determined by whichever of the following rules is applicable
16 and provides the largest annuity:
17     Rule 1: The retirement annuity shall be 1.67% of final rate
18 of earnings for each of the first 10 years of service, 1.90%
19 for each of the next 10 years of service, 2.10% for each year
20 of service in excess of 20 but not exceeding 30, and 2.30% for
21 each year in excess of 30; or for persons who retire on or
22 after January 1, 1998, 2.2% of the final rate of earnings for
23 each year of service.
24     Rule 2: The retirement annuity shall be the sum of the
25 following, determined from amounts credited to the participant
26 in accordance with the actuarial tables and the prescribed rate
27 of interest in effect at the time the retirement annuity
28 begins:
29         (i) the normal annuity which can be provided on an
30     actuarially equivalent basis, by the accumulated normal
31     contributions as of the date the annuity begins;
32         (ii) an annuity from employer contributions of an

 

 

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1     amount equal to that which can be provided on an
2     actuarially equivalent basis from the accumulated normal
3     contributions made by the participant under Section
4     15-113.6 and Section 15-113.7 plus 1.4 times all other
5     accumulated normal contributions made by the participant;
6     and
7         (iii) the annuity that can be provided on an
8     actuarially equivalent basis from the entire contribution
9     made by the participant under Section 15-113.3.
10     With respect to a police officer or firefighter who retires
11 on or after August 14, 1998, the accumulated normal
12 contributions taken into account under clauses (i) and (ii) of
13 this Rule 2 shall include the additional normal contributions
14 made by the police officer or firefighter under Section
15 15-157(a).
16     The amount of a retirement annuity calculated under this
17 Rule 2 shall be computed solely on the basis of the
18 participant's accumulated normal contributions, as specified
19 in this Rule and defined in Section 15-116. Neither an employee
20 or employer contribution for early retirement under Section
21 15-136.2 nor any other employer contribution shall be used in
22 the calculation of the amount of a retirement annuity under
23 this Rule 2.
24     This amendatory Act of the 91st General Assembly is a
25 clarification of existing law and applies to every participant
26 and annuitant without regard to whether status as an employee
27 terminates before the effective date of this amendatory Act.
28     Rule 3: The retirement annuity of a participant who is
29 employed at least one-half time during the period on which his
30 or her final rate of earnings is based, shall be equal to the
31 participant's years of service not to exceed 30, multiplied by
32 (1) $96 if the participant's final rate of earnings is less
33 than $3,500, (2) $108 if the final rate of earnings is at least
34 $3,500 but less than $4,500, (3) $120 if the final rate of
35 earnings is at least $4,500 but less than $5,500, (4) $132 if
36 the final rate of earnings is at least $5,500 but less than

 

 

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1 $6,500, (5) $144 if the final rate of earnings is at least
2 $6,500 but less than $7,500, (6) $156 if the final rate of
3 earnings is at least $7,500 but less than $8,500, (7) $168 if
4 the final rate of earnings is at least $8,500 but less than
5 $9,500, and (8) $180 if the final rate of earnings is $9,500 or
6 more, except that the annuity for those persons having made an
7 election under Section 15-154(a-1) shall be calculated and
8 payable under the portable retirement benefit program pursuant
9 to the provisions of Section 15-136.4.
10     Rule 4: A participant who is at least age 50 and has 25 or
11 more years of service as a police officer or firefighter, and a
12 participant who is age 55 or over and has at least 20 but less
13 than 25 years of service as a police officer or firefighter,
14 shall be entitled to a retirement annuity of 2 1/4% of the
15 final rate of earnings for each of the first 10 years of
16 service as a police officer or firefighter, 2 1/2% for each of
17 the next 10 years of service as a police officer or
18 firefighter, and 2 3/4% for each year of service as a police
19 officer or firefighter in excess of 20. The retirement annuity
20 for all other service shall be computed under Rule 1.
21     For purposes of this Rule 4, a participant's service as a
22 firefighter shall also include the following:
23         (i) service that is performed while the person is an
24     employee under subsection (h) of Section 15-107; and
25         (ii) in the case of an individual who was a
26     participating employee employed in the fire department of
27     the University of Illinois's Champaign-Urbana campus
28     immediately prior to the elimination of that fire
29     department and who immediately after the elimination of
30     that fire department transferred to another job with the
31     University of Illinois, service performed as an employee of
32     the University of Illinois in a position other than police
33     officer or firefighter, from the date of that transfer
34     until the employee's next termination of service with the
35     University of Illinois.
36     Rule 5: The retirement annuity of a participant who elected

 

 

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1 early retirement under the provisions of Section 15-136.2 and
2 who, on or before February 16, 1995, brought administrative
3 proceedings pursuant to the administrative rules adopted by the
4 System to challenge the calculation of his or her retirement
5 annuity shall be the sum of the following, determined from
6 amounts credited to the participant in accordance with the
7 actuarial tables and the prescribed rate of interest in effect
8 at the time the retirement annuity begins:
9         (i) the normal annuity which can be provided on an
10     actuarially equivalent basis, by the accumulated normal
11     contributions as of the date the annuity begins; and
12         (ii) an annuity from employer contributions of an
13     amount equal to that which can be provided on an
14     actuarially equivalent basis from the accumulated normal
15     contributions made by the participant under Section
16     15-113.6 and Section 15-113.7 plus 1.4 times all other
17     accumulated normal contributions made by the participant;
18     and
19         (iii) an annuity which can be provided on an
20     actuarially equivalent basis from the employee
21     contribution for early retirement under Section 15-136.2,
22     and an annuity from employer contributions of an amount
23     equal to that which can be provided on an actuarially
24     equivalent basis from the employee contribution for early
25     retirement under Section 15-136.2.
26     In no event shall a retirement annuity under this Rule 5 be
27 lower than the amount obtained by adding (1) the monthly amount
28 obtained by dividing the combined employee and employer
29 contributions made under Section 15-136.2 by the System's
30 annuity factor for the age of the participant at the beginning
31 of the annuity payment period and (2) the amount equal to the
32 participant's annuity if calculated under Rule 1, reduced under
33 Section 15-136(b) as if no contributions had been made under
34 Section 15-136.2.
35     With respect to a participant who is qualified for a
36 retirement annuity under this Rule 5 whose retirement annuity

 

 

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1 began before the effective date of this amendatory Act of the
2 91st General Assembly, and for whom an employee contribution
3 was made under Section 15-136.2, the System shall recalculate
4 the retirement annuity under this Rule 5 and shall pay any
5 additional amounts due in the manner provided in Section
6 15-186.1 for benefits mistakenly set too low.
7     The amount of a retirement annuity calculated under this
8 Rule 5 shall be computed solely on the basis of those
9 contributions specifically set forth in this Rule 5. Except as
10 provided in clause (iii) of this Rule 5, neither an employee
11 nor employer contribution for early retirement under Section
12 15-136.2, nor any other employer contribution, shall be used in
13 the calculation of the amount of a retirement annuity under
14 this Rule 5.
15     The General Assembly has adopted the changes set forth in
16 Section 25 of this amendatory Act of the 91st General Assembly
17 in recognition that the decision of the Appellate Court for the
18 Fourth District in Mattis v. State Universities Retirement
19 System et al. might be deemed to give some right to the
20 plaintiff in that case. The changes made by Section 25 of this
21 amendatory Act of the 91st General Assembly are a legislative
22 implementation of the decision of the Appellate Court for the
23 Fourth District in Mattis v. State Universities Retirement
24 System et al. with respect to that plaintiff.
25     The changes made by Section 25 of this amendatory Act of
26 the 91st General Assembly apply without regard to whether the
27 person is in service as an employee on or after its effective
28 date.
29     (b) The retirement annuity provided under Rules 1 and 3
30 above shall be reduced by 1/2 of 1% for each month the
31 participant is under age 60 at the time of retirement. However,
32 this reduction shall not apply in the following cases:
33         (1) For a disabled participant whose disability
34     benefits have been discontinued because he or she has
35     exhausted eligibility for disability benefits under clause
36     (6) of Section 15-152;

 

 

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1         (2) For a participant who has at least the number of
2     years of service required to retire at any age under
3     subsection (a) of Section 15-135; or
4         (3) For that portion of a retirement annuity which has
5     been provided on account of service of the participant
6     during periods when he or she performed the duties of a
7     police officer or firefighter, if these duties were
8     performed for at least 5 years immediately preceding the
9     date the retirement annuity is to begin.
10     (c) The maximum retirement annuity provided under Rules 1,
11 2, 4, and 5 shall be the lesser of (1) the annual limit of
12 benefits as specified in Section 415 of the Internal Revenue
13 Code of 1986, as such Section may be amended from time to time
14 and as such benefit limits shall be adjusted by the
15 Commissioner of Internal Revenue, and (2) 80% of final rate of
16 earnings.
17     (d) An annuitant whose status as an employee terminates
18 after August 14, 1969 shall receive automatic increases in his
19 or her retirement annuity as follows:
20     Effective January 1 immediately following the date the
21 retirement annuity begins, the annuitant shall receive an
22 increase in his or her monthly retirement annuity of 0.125% of
23 the monthly retirement annuity provided under Rule 1, Rule 2,
24 Rule 3, Rule 4, or Rule 5, contained in this Section,
25 multiplied by the number of full months which elapsed from the
26 date the retirement annuity payments began to January 1, 1972,
27 plus 0.1667% of such annuity, multiplied by the number of full
28 months which elapsed from January 1, 1972, or the date the
29 retirement annuity payments began, whichever is later, to
30 January 1, 1978, plus 0.25% of such annuity multiplied by the
31 number of full months which elapsed from January 1, 1978, or
32 the date the retirement annuity payments began, whichever is
33 later, to the effective date of the increase.
34     The annuitant shall receive an increase in his or her
35 monthly retirement annuity on each January 1 thereafter during
36 the annuitant's life of 3% of the monthly annuity provided

 

 

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1 under Rule 1, Rule 2, Rule 3, Rule 4, or Rule 5 contained in
2 this Section. The change made under this subsection by P.A.
3 81-970 is effective January 1, 1980 and applies to each
4 annuitant whose status as an employee terminates before or
5 after that date.
6     Beginning January 1, 1990, all automatic annual increases
7 payable under this Section shall be calculated as a percentage
8 of the total annuity payable at the time of the increase,
9 including all increases previously granted under this Article.
10     The change made in this subsection by P.A. 85-1008 is
11 effective January 26, 1988, and is applicable without regard to
12 whether status as an employee terminated before that date.
13     (e) If, on January 1, 1987, or the date the retirement
14 annuity payment period begins, whichever is later, the sum of
15 the retirement annuity provided under Rule 1 or Rule 2 of this
16 Section and the automatic annual increases provided under the
17 preceding subsection or Section 15-136.1, amounts to less than
18 the retirement annuity which would be provided by Rule 3, the
19 retirement annuity shall be increased as of January 1, 1987, or
20 the date the retirement annuity payment period begins,
21 whichever is later, to the amount which would be provided by
22 Rule 3 of this Section. Such increased amount shall be
23 considered as the retirement annuity in determining benefits
24 provided under other Sections of this Article. This paragraph
25 applies without regard to whether status as an employee
26 terminated before the effective date of this amendatory Act of
27 1987, provided that the annuitant was employed at least
28 one-half time during the period on which the final rate of
29 earnings was based.
30     (f) A participant is entitled to such additional annuity as
31 may be provided on an actuarially equivalent basis, by any
32 accumulated additional contributions to his or her credit.
33 However, the additional contributions made by the participant
34 toward the automatic increases in annuity provided under this
35 Section shall not be taken into account in determining the
36 amount of such additional annuity.

 

 

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1     (g) If, (1) by law, a function of a governmental unit, as
2 defined by Section 20-107 of this Code, is transferred in whole
3 or in part to an employer, and (2) a participant transfers
4 employment from such governmental unit to such employer within
5 6 months after the transfer of the function, and (3) the sum of
6 (A) the annuity payable to the participant under Rule 1, 2, or
7 3 of this Section (B) all proportional annuities payable to the
8 participant by all other retirement systems covered by Article
9 20, and (C) the initial primary insurance amount to which the
10 participant is entitled under the Social Security Act, is less
11 than the retirement annuity which would have been payable if
12 all of the participant's pension credits validated under
13 Section 20-109 had been validated under this system, a
14 supplemental annuity equal to the difference in such amounts
15 shall be payable to the participant.
16     (h) On January 1, 1981, an annuitant who was receiving a
17 retirement annuity on or before January 1, 1971 shall have his
18 or her retirement annuity then being paid increased $1 per
19 month for each year of creditable service. On January 1, 1982,
20 an annuitant whose retirement annuity began on or before
21 January 1, 1977, shall have his or her retirement annuity then
22 being paid increased $1 per month for each year of creditable
23 service.
24     (i) On January 1, 1987, any annuitant whose retirement
25 annuity began on or before January 1, 1977, shall have the
26 monthly retirement annuity increased by an amount equal to 8¢
27 per year of creditable service times the number of years that
28 have elapsed since the annuity began.
29     (j) On July 1, 2005, every annuitant who began receiving a
30 retirement annuity before January 1, 1980 shall have the
31 monthly retirement annuity increased by whichever of the
32 following percentages is applicable:
33         5% if the annuity began in 1979;
34         10% if the annuity began in 1978;
35         14% if the annuity began in 1977;
36         14% if the annuity began in 1976;

 

 

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1         18% if the annuity began in 1975;
2         23% if the annuity began in 1974;
3         32% if the annuity began in 1973 or before.
4     The increase under this subsection shall be calculated as a
5 percentage of the amount of the retirement annuity payable on
6 June 30, 2005, including any increases previously received
7 under this Article, and shall be included in the calculation of
8 increases granted thereafter under subsection (d).
9 (Source: P.A. 92-16, eff. 6-28-01; 93-347, eff. 7-24-03.)
 
10     (40 ILCS 5/15-136.3)
11     Sec. 15-136.3. Minimum retirement annuity.
12     (a) Beginning January 1, 1997, any person who is receiving
13 a monthly retirement annuity under this Article which, after
14 inclusion of (1) all one-time and automatic annual increases to
15 which the person is entitled, (2) any supplemental annuity
16 payable under Section 15-136.1, and (3) any amount deducted
17 under Section 15-138 or 15-140 to provide a reversionary
18 annuity, is less than the minimum monthly retirement benefit
19 amount specified in subsection (b) of this Section, shall be
20 entitled to a monthly supplemental payment equal to the
21 difference.
22     (b) For purposes of the calculation in subsection (a), the
23 minimum monthly retirement benefit amount is the sum of $25 for
24 each year of service credit, up to a maximum of 30 years of
25 service, plus the amount of the increase received by the
26 annuitant under subsection (j) of Section 15-136, if any.
27     (c) This Section applies to all persons receiving a
28 retirement annuity under this Article, without regard to
29 whether or not employment terminated prior to the effective
30 date of this Section.
31 (Source: P.A. 89-616, eff. 8-9-96.)
 
32     (40 ILCS 5/15-137.1 new)
33     Sec. 15-137.1. Reduction of purchasing power; policy;
34 report; increase.

 

 

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1     (a) The General Assembly finds and declares that:
2         (1) The purchasing power of a fixed annuity can be
3     eroded over time by the effects of inflation and increases
4     in the general cost of living.
5         (2) For a person whose income consists primarily of a
6     fixed annuity, the reduction in purchasing power resulting
7     from increases in the cost of living can become
8     catastrophic over time, transforming a once-comfortable
9     retirement into a time of poverty and need.
10         (3) The State of Illinois is concerned about the
11     effects that a significant reduction in purchasing power
12     can have on the quality of life of retired employees and
13     their survivors.
14         (4) The General Assembly has previously addressed this
15     concern by providing for automatic annual increases in
16     retirement and survivor's annuities under this Article.
17     Recognizing that these automatic annual increases, by
18     themselves, are not a complete answer in times of high
19     inflation, the General Assembly has also, from time to
20     time, provided specific one-time increases in annuities
21     for certain categories of annuitants.
22     (b) It is the public policy of this State and the intention
23 of the General Assembly to protect annuitants against
24 significant decreases in the purchasing power of the retirement
25 and survivor's annuities granted under this Article.
26     (c) The System shall regularly review the changes that have
27 occurred in the purchasing power of the retirement and
28 survivor's annuities being paid under this Article, and it
29 shall report to the General Assembly, the Governor, and the
30 Commission on Government Forecasting and Accountability
31 whenever it determines that the original purchasing power of
32 those annuities has been reduced by 20% or more for any
33 category or group of annuitants. The System may include in the
34 report its recommendations, if any, for legislative action to
35 address its findings.
36     (d) As used in this Section, the term "retirement and

 

 

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1 survivor's annuities" means all retirement annuities and those
2 survivors insurance benefits payable in the form of an annuity.
3     (e) This Section does not apply to any benefits under the
4 self-managed plan.
 
5     (40 ILCS 5/15-145)  (from Ch. 108 1/2, par. 15-145)
6     Sec. 15-145. Survivors insurance benefits; conditions and
7 amounts.
8     (a) The survivors insurance benefits provided under this
9 Section shall be payable to the eligible survivors of a
10 participant covered under the traditional benefit package upon
11 the death of (1) a participating employee with at least 1 1/2
12 years of service, (2) a participant who terminated employment
13 with at least 10 years of service, and (3) an annuitant in
14 receipt of a retirement annuity or disability retirement
15 annuity under this Article.
16     Service under the State Employees' Retirement System of
17 Illinois, the Teachers' Retirement System of the State of
18 Illinois and the Public School Teachers' Pension and Retirement
19 Fund of Chicago shall be considered in determining eligibility
20 for survivors benefits under this Section.
21     If by law, a function of a governmental unit, as defined by
22 Section 20-107, is transferred in whole or in part to an
23 employer, and an employee transfers employment from this
24 governmental unit to such employer within 6 months after the
25 transfer of this function, the service credits in the
26 governmental unit's retirement system which have been
27 validated under Section 20-109 shall be considered in
28 determining eligibility for survivors benefits under this
29 Section.
30     (b) A surviving spouse of a deceased participant, or of a
31 deceased annuitant who did not take a refund or additional
32 annuity consisting of accumulated survivors insurance
33 contributions, shall receive a survivors annuity of 30% of the
34 final rate of earnings. Payments shall begin on the day
35 following the participant's or annuitant's death or the date

 

 

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1 the surviving spouse attains age 50, whichever is later, and
2 continue until the death of the surviving spouse. The annuity
3 shall be payable to the surviving spouse prior to attainment of
4 age 50 if the surviving spouse has in his or her care a
5 deceased participant's or annuitant's dependent unmarried
6 child under age 18 (under age 22 if a full-time student) who is
7 eligible for a survivors annuity.
8     Remarriage of a surviving spouse prior to attainment of age
9 55 that occurs before the effective date of this amendatory Act
10 of the 91st General Assembly shall disqualify him or her for
11 the receipt of a survivors annuity until July 6, 2000.
12     A surviving spouse whose survivors annuity has been
13 terminated due to remarriage may apply for reinstatement of
14 that annuity. The reinstated annuity shall begin to accrue on
15 July 6, 2000, except that if, on July 6, 2000, the annuity is
16 payable to an eligible surviving child or parent, payment of
17 the annuity to the surviving spouse shall not be reinstated
18 until the annuity is no longer payable to any eligible
19 surviving child or parent. The reinstated annuity shall include
20 any one-time or annual increases received prior to the date of
21 termination, as well as any increases that would otherwise have
22 accrued from the date of termination to the date of
23 reinstatement. An eligible surviving spouse whose expectation
24 of receiving a survivors annuity was lost due to remarriage
25 before attainment of age 50 shall also be entitled to
26 reinstatement under this subsection, but the resulting
27 survivors annuity shall not begin to accrue sooner than upon
28 the surviving spouse's attainment of age 50.
29     The changes made to this subsection by this amendatory Act
30 of the 92nd General Assembly (pertaining to remarriage prior to
31 age 55 or 50) apply without regard to whether the deceased
32 participant or annuitant was in service on or after the
33 effective date of this amendatory Act.
34     (c) Each dependent unmarried child under age 18 (under age
35 22 if a full-time student) of a deceased participant, or of a
36 deceased annuitant who did not take a refund or additional

 

 

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1 annuity consisting of accumulated survivors insurance
2 contributions, shall receive a survivors annuity equal to the
3 sum of (1) 20% of the final rate of earnings, and (2) 10% of the
4 final rate of earnings divided by the number of children
5 entitled to this benefit. Payments shall begin on the day
6 following the participant's or annuitant's death and continue
7 until the child marries, dies, or attains age 18 (age 22 if a
8 full-time student). If the child is in the care of a surviving
9 spouse who is eligible for survivors insurance benefits, the
10 child's benefit shall be paid to the surviving spouse.
11     Each unmarried child over age 18 of a deceased participant
12 or of a deceased annuitant who had a survivor's insurance
13 beneficiary at the time of his or her retirement, and who was
14 dependent upon the participant or annuitant by reason of a
15 physical or mental disability which began prior to the date the
16 child attained age 18 (age 22 if a full-time student), shall
17 receive a survivor's annuity equal to the sum of (1) 20% of the
18 final rate of earnings, and (2) 10% of the final rate of
19 earnings divided by the number of children entitled to
20 survivors benefits. Payments shall begin on the day following
21 the participant's or annuitant's death and continue until the
22 child marries, dies, or is no longer disabled. If the child is
23 in the care of a surviving spouse who is eligible for survivors
24 insurance benefits, the child's benefit may be paid to the
25 surviving spouse. For the purposes of this Section, disability
26 means inability to engage in any substantial gainful activity
27 by reason of any medically determinable physical or mental
28 impairment that can be expected to result in death or that has
29 lasted or can be expected to last for a continuous period of at
30 least one year.
31     (d) Each dependent parent of a deceased participant, or of
32 a deceased annuitant who did not take a refund or additional
33 annuity consisting of accumulated survivors insurance
34 contributions, shall receive a survivors annuity equal to the
35 sum of (1) 20% of final rate of earnings, and (2) 10% of final
36 rate of earnings divided by the number of parents who qualify

 

 

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1 for the benefit. Payments shall begin when the parent reaches
2 age 55 or the day following the participant's or annuitant's
3 death, whichever is later, and continue until the parent dies.
4 Remarriage of a parent prior to attainment of age 55 shall
5 disqualify the parent for the receipt of a survivors annuity.
6     (e) In addition to the survivors annuity provided above,
7 each survivors insurance beneficiary shall, upon death of the
8 participant or annuitant, receive a lump sum payment of $1,000
9 divided by the number of such beneficiaries.
10     (f) The changes made in this Section by Public Act 81-712
11 pertaining to survivors annuities in cases of remarriage prior
12 to age 55 shall apply to each survivors insurance beneficiary
13 who remarries after June 30, 1979, regardless of the date that
14 the participant or annuitant terminated his employment or died.
15     The change made to this Section by this amendatory Act of
16 the 91st General Assembly, pertaining to remarriage prior to
17 age 55, applies without regard to whether the deceased
18 participant or annuitant was in service on or after the
19 effective date of this amendatory Act of the 91st General
20 Assembly.
21     (g) On January 1, 1981, any person who was receiving a
22 survivors annuity on or before January 1, 1971 shall have the
23 survivors annuity then being paid increased by 1% for each full
24 year which has elapsed from the date the annuity began. On
25 January 1, 1982, any survivor whose annuity began after January
26 1, 1971, but before January 1, 1981, shall have the survivor's
27 annuity then being paid increased by 1% for each year which has
28 elapsed from the date the survivor's annuity began. On January
29 1, 1987, any survivor who began receiving a survivor's annuity
30 on or before January 1, 1977, shall have the monthly survivor's
31 annuity increased by $1 for each full year which has elapsed
32 since the date the survivor's annuity began.
33     (g-1) On July 1, 2005, every recipient of a survivor's
34 annuity whose original annuity began before January 1, 1980
35 shall have the monthly survivor's annuity increased by
36 whichever of the following percentages is applicable:

 

 

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1         5% if the original annuity began in 1979;
2         10% if the original annuity began in 1978;
3         14% if the original annuity began in 1977;
4         14% if the original annuity began in 1976;
5         18% if the original annuity began in 1975;
6         23% if the original annuity began in 1974;
7         32% if the original annuity began in 1973 or before.
8     In the case of the survivor of a deceased annuitant who
9 died while receiving a retirement annuity, "original annuity"
10 means the deceased annuitant's retirement annuity; in all other
11 cases, "original annuity" means the survivor's annuity.
12     The increase under this subsection shall be calculated as a
13 percentage of the amount of the survivor's annuity payable on
14 June 30, 2005, including any increases previously received
15 under this Article, and shall be included in the calculation of
16 increases granted thereafter under subsection (j).
17     (h) If the sum of the lump sum and total monthly survivor
18 benefits payable under this Section upon the death of a
19 participant amounts to less than the sum of the death benefits
20 payable under items (2) and (3) of Section 15-141, the
21 difference shall be paid in a lump sum to the beneficiary of
22 the participant who is living on the date that this additional
23 amount becomes payable.
24     (i) If the sum of the lump sum and total monthly survivor
25 benefits payable under this Section upon the death of an
26 annuitant receiving a retirement annuity or disability
27 retirement annuity amounts to less than the death benefit
28 payable under Section 15-142, the difference shall be paid to
29 the beneficiary of the annuitant who is living on the date that
30 this additional amount becomes payable.
31     (j) Effective on the later of (1) January 1, 1990, or (2)
32 the January 1 on or next after the date on which the survivor
33 annuity begins, if the deceased member died while receiving a
34 retirement annuity, or in all other cases the January 1 nearest
35 the first anniversary of the date the survivor annuity payments
36 begin, every survivors insurance beneficiary shall receive an

 

 

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1 increase in his or her monthly survivors annuity of 3%. On each
2 January 1 after the initial increase, the monthly survivors
3 annuity shall be increased by 3% of the total survivors annuity
4 provided under this Article, including previous increases
5 provided by this subsection. Such increases shall apply to the
6 survivors insurance beneficiaries of each participant and
7 annuitant, whether or not the employment status of the
8 participant or annuitant terminates before the effective date
9 of this amendatory Act of 1990. This subsection (j) also
10 applies to persons receiving a survivor annuity under the
11 portable benefit package.
12     (k) If the Internal Revenue Code of 1986, as amended,
13 requires that the survivors benefits be payable at an age
14 earlier than that specified in this Section the benefits shall
15 begin at the earlier age, in which event, the survivor's
16 beneficiary shall be entitled only to that amount which is
17 equal to the actuarial equivalent of the benefits provided by
18 this Section.
19     (l) The changes made to this Section and Section 15-131 by
20 this amendatory Act of 1997, relating to benefits for certain
21 unmarried children who are full-time students under age 22,
22 apply without regard to whether the deceased member was in
23 service on or after the effective date of this amendatory Act
24 of 1997. These changes do not authorize the repayment of a
25 refund or a re-election of benefits, and any benefit or
26 increase in benefits resulting from these changes is not
27 payable retroactively for any period before the effective date
28 of this amendatory Act of 1997.
29 (Source: P.A. 91-887, eff. 7-6-00; 92-749, eff. 8-2-02.)
 
30     (40 ILCS 5/15-155)  (from Ch. 108 1/2, par. 15-155)
31     Sec. 15-155. Employer contributions.
32     (a) The State of Illinois shall make contributions by
33 appropriations of amounts which, together with the other
34 employer contributions from trust, federal, and other funds,
35 employee contributions, income from investments, and other

 

 

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1 income of this System, will be sufficient to meet the cost of
2 maintaining and administering the System on a 90% funded basis
3 in accordance with actuarial recommendations.
4     The Board shall determine the amount of State contributions
5 required for each fiscal year on the basis of the actuarial
6 tables and other assumptions adopted by the Board and the
7 recommendations of the actuary, using the formulae formula in
8 subsection (a-1) and subsection (a-2). The minimum
9 contribution to the System to be made by the State for each
10 fiscal year shall be the sum of the amount determined under
11 subsection (a-1) and the amount determined under subsection
12 (a-2).
13     (a-1) For State fiscal years 2011 through 2045, the minimum
14 contribution to the System to be made by the State for each
15 fiscal year shall be an amount determined by the System to be
16 sufficient to bring the total assets of the System up to 90% of
17 the total actuarial liabilities of the System (other than the
18 liabilities described in subsection (a-2) of this Section) by
19 the end of State fiscal year 2045. In making these
20 determinations, the required State contribution shall be
21 calculated each year as a level percentage of payroll over the
22 years remaining to and including fiscal year 2045 and shall be
23 determined under the projected unit credit actuarial cost
24 method.
25     For State fiscal years 1996 through 2010, the State
26 contribution to the System, as a percentage of the applicable
27 employee payroll, shall be increased in equal annual increments
28 so that by State fiscal year 2011, the State is contributing at
29 the rate required under this Section.
30     Beginning in State fiscal year 2046, the minimum State
31 contribution for each fiscal year shall be the amount needed to
32 maintain the total assets of the System at 90% of the total
33 actuarial liabilities of the System.
34     Notwithstanding any other provision of this Section, the
35 required State contribution for State fiscal year 2005 and each
36 fiscal year thereafter, as calculated under this Section and

 

 

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1 certified under Section 15-165, shall not exceed an amount
2 equal to (i) the amount of the required State contribution that
3 would have been calculated under this Section for that fiscal
4 year if the System had not received any payments under
5 subsection (d) of Section 7.2 of the General Obligation Bond
6 Act, minus (ii) the portion of the State's total debt service
7 payments for that fiscal year on the bonds issued for the
8 purposes of that Section 7.2, as determined and certified by
9 the Comptroller, that is the same as the System's portion of
10 the total moneys distributed under subsection (d) of Section
11 7.2 of the General Obligation Bond Act.
12     (a-2) The cost of the one-time increases granted by this
13 amendatory Act of the 94th General Assembly under subsection
14 (j) of Section 15-136, subsection (b) of Section 15-136.3
15 (insofar as it derives from that subsection (j) increase), and
16 subsection (g-1) of Section 15-145 shall be paid by the State
17 on a level dollar basis over a period of 10 years beginning
18 July 1, 2007. These contributions are in addition to, and shall
19 not be included in the calculation of, the State contribution
20 required under subsection (a-1).
21     (b) If an employee is paid from trust or federal funds, the
22 employer shall pay to the Board contributions from those funds
23 which are sufficient to cover the accruing normal costs on
24 behalf of the employee. However, universities having employees
25 who are compensated out of local auxiliary funds, income funds,
26 or service enterprise funds are not required to pay such
27 contributions on behalf of those employees. The local auxiliary
28 funds, income funds, and service enterprise funds of
29 universities shall not be considered trust funds for the
30 purpose of this Article, but funds of alumni associations,
31 foundations, and athletic associations which are affiliated
32 with the universities included as employers under this Article
33 and other employers which do not receive State appropriations
34 are considered to be trust funds for the purpose of this
35 Article.
36     (b-1) The City of Urbana and the City of Champaign shall

 

 

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1 each make employer contributions to this System for their
2 respective firefighter employees who participate in this
3 System pursuant to subsection (h) of Section 15-107. The rate
4 of contributions to be made by those municipalities shall be
5 determined annually by the Board on the basis of the actuarial
6 assumptions adopted by the Board and the recommendations of the
7 actuary, and shall be expressed as a percentage of salary for
8 each such employee. The Board shall certify the rate to the
9 affected municipalities as soon as may be practical. The
10 employer contributions required under this subsection shall be
11 remitted by the municipality to the System at the same time and
12 in the same manner as employee contributions.
13     (c) Through State fiscal year 1995: The total employer
14 contribution shall be apportioned among the various funds of
15 the State and other employers, whether trust, federal, or other
16 funds, in accordance with actuarial procedures approved by the
17 Board. State of Illinois contributions for employers receiving
18 State appropriations for personal services shall be payable
19 from appropriations made to the employers or to the System. The
20 contributions for Class I community colleges covering earnings
21 other than those paid from trust and federal funds, shall be
22 payable solely from appropriations to the Illinois Community
23 College Board or the System for employer contributions.
24     (d) Beginning in State fiscal year 1996, the required State
25 contributions to the System shall be appropriated directly to
26 the System and shall be payable through vouchers issued in
27 accordance with subsection (c) of Section 15-165.
28     (e) The State Comptroller shall draw warrants payable to
29 the System upon proper certification by the System or by the
30 employer in accordance with the appropriation laws and this
31 Code.
32     (f) Normal costs under this Section means liability for
33 pensions and other benefits which accrues to the System because
34 of the credits earned for service rendered by the participants
35 during the fiscal year and expenses of administering the
36 System, but shall not include the principal of or any

 

 

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1 redemption premium or interest on any bonds issued by the Board
2 or any expenses incurred or deposits required in connection
3 therewith.
4 (Source: P.A. 93-2, eff. 4-7-03.)
 
5     (40 ILCS 5/15-165)   (from Ch. 108 1/2, par. 15-165)
6     Sec. 15-165. To certify amounts and submit vouchers.
7     (a) The Board shall certify to the Governor on or before
8 November 15 of each year the appropriation required from State
9 funds for the purposes of this System for the following fiscal
10 year. The certification shall include a copy of the actuarial
11 recommendations upon which it is based.
12     On or before May 1, 2004, the Board shall recalculate and
13 recertify to the Governor the amount of the required State
14 contribution to the System for State fiscal year 2005, taking
15 into account the amounts appropriated to and received by the
16 System under subsection (d) of Section 7.2 of the General
17 Obligation Bond Act.
18     (b) The Board shall certify to the State Comptroller or
19 employer, as the case may be, from time to time, by its
20 president and secretary, with its seal attached, the amounts
21 payable to the System from the various funds.
22     (c) Beginning in State fiscal year 1996, on or as soon as
23 possible after the 15th day of each month the Board shall
24 submit vouchers for payment of State contributions to the
25 System, in a total monthly amount of one-twelfth of the
26 required annual State contribution certified under subsection
27 (a). From the effective date of this amendatory Act of the 93rd
28 General Assembly through June 30, 2004, the Board shall not
29 submit vouchers for the remainder of fiscal year 2004 in excess
30 of the fiscal year 2004 certified contribution amount
31 determined under this Section after taking into consideration
32 the transfer to the System under subsection (b) of Section
33 6z-61 of the State Finance Act. These vouchers shall be paid by
34 the State Comptroller and Treasurer by warrants drawn on the
35 funds appropriated to the System for that fiscal year.

 

 

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1     If in any month the amount remaining unexpended from all
2 other appropriations to the System for the applicable fiscal
3 year (including the appropriations to the System under Section
4 8.12 of the State Finance Act and Section 1 of the State
5 Pension Funds Continuing Appropriation Act) is less than the
6 amount lawfully vouchered under this Section, the difference
7 shall be paid from the General Revenue Fund under the
8 continuing appropriation authority provided in Section 1.1 of
9 the State Pension Funds Continuing Appropriation Act.
10     (d) So long as the payments received are the full amount
11 lawfully vouchered under this Section, payments received by the
12 System under this Section shall be applied first toward the
13 employer contribution to the self-managed plan established
14 under Section 15-158.2. Payments shall be applied second toward
15 the employer's portion of the normal costs of the System, as
16 defined in subsection (f) of Section 15-155. The balance shall
17 be applied toward the unfunded actuarial liabilities of the
18 System.
19     (e) In the event that the System does not receive, as a
20 result of legislative enactment or otherwise, payments
21 sufficient to fully fund the employer contribution to the
22 self-managed plan established under Section 15-158.2 and to
23 fully fund that portion of the employer's portion of the normal
24 costs of the System, as calculated in accordance with
25 subsections (a-1) and (a-2) of Section 15-155 15-155(a-1), then
26 any payments received shall be applied proportionately to the
27 optional retirement program established under Section 15-158.2
28 and to the employer's portion of the normal costs of the
29 System, as calculated in accordance with subsections (a-1) and
30 (a-2) of Section 15-155 15-155(a-1).
31 (Source: P.A. 93-2, eff. 4-7-03; 93-665, eff. 3-5-04.)
 
32     Section 99. Effective date. This Act takes effect upon
33 becoming law.